Is road freight decoupling from GDP per capita growth in China?

China - Sep 28 2018

The relation between gross domestic product (GDP) and road freight is historically very strong. In a 1992 study, the World Bank stated that the variations of GDP explained nearly 89% of the variations in road transport. 

Some people thought that the road tonne-km/GDP elasticity would remain close to 1 for the foreseeable future, meaning that a 1% increase in GDP would lead to a 1% increase in road tonne-km. This is now proving not to be the case in several developed countries, like France or the UK. This is highlighted in the right figure of the following graph, where since 2012 in France the GDP has been on a steady rise while road freight transport has experienced a relatively steep drop (in purple). 

Road freight transport versus GDP per capita for China (left) and France (right)

 

For China (left figure of the graph), the situation is different altogether. One can identify 3 major trends throughout the years: (1) between 1990 and 2007, where road freight transport grew less than the GDP (in blue), (2) between 2007 and 2012 where there was an abrupt expansion in road ton-km (in grey) and (3) between 2012 and 2015 where road ton-km increase seems to return to the first period level (in green). Though it is still too early to make definitive conclusions, this may indicate the start of the decoupling between road freight and GDP in China. It could also reinforce the leapfrog theory as the GDP per capita in China is nowhere near that of France in 2012. All things considered and if confirmed, this is good news as the transport sector still represents a significative part in global greenhouse gas emissions.

 

Ruben Haalebos, Analyst, Data Science Dpt.  - Sources: Beyond Ratings, OECD, World Bank 

 
 

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